For foreign buyers, a condominium is often the most straightforward form of property ownership in Thailand. Unlike the purchase of a house or villa, a condominium purchase does not primarily involve acquiring land. Instead, the buyer acquires a legally defined unit within a registered condominium project.

However, purchasing a condominium is not without risk. Before making any payment or signing any document, buyers should verify that the unit is registered as part of a condominium, that it can be transferred within the Foreign Quota, that the seller is the legal owner and that the transfer can legally be registered at the responsible Land Office.

This review is particularly important for foreign buyers, Swiss investors, couples of different nationalities, heirs and anyone intending to use the condominium as a holiday home, retirement property, rental investment or long-term residence.

A Condo is not the same as an Apartment

A common mistake is to treat terms such as “condo”, “apartment”, “residence” and “serviced apartment” as if they meant the same thing. Legally, they do not.

A condominium is a project registered under Thai law in which individual units can be transferred and registered separately. An apartment or residence may be based on a different contractual structure, such as a tenancy, licence or right of use.

This distinction is essential for foreign buyers. Foreign freehold ownership of an individual unit is only possible if the property is genuinely registered as a condominium and the legal requirements are satisfied.

Foreign Quota: Check the 49% Limit

The central issue for a foreign buyer purchasing a condominium is the Foreign Quota. Under the Condominium Act, foreign nationals and certain foreign legal entities may generally own no more than 49% of the total floor area of all units in a condominium project.

Thai Quota: Why caution is necessary

Not every unit in a condominium project can automatically be transferred to a foreign buyer as freehold ownership. A project may contain units allocated to the Foreign Quota and units allocated to the Thai Quota.

A foreign buyer cannot acquire a Thai Quota unit as foreign freehold ownership. In practice, such units may be offered through Thai companies, leasehold arrangements or other structures. These alternatives must be examined carefully because they can carry significantly different legal risks from a direct Foreign Quota freehold purchase.

Particular caution is required when a unit is marketed as “foreign buyer friendly” without clear confirmation that it can genuinely be transferred within the Foreign Quota.

Due Diligence Checklist for buying a Condominium

1. verify the condominium registration

The first step is to determine whether the building is genuinely registered as a condominium. Marketing terminology alone is not sufficient.

The following points should be checked:

• condominium registration,
• the registered project name,
• the responsible Land Office,
• the unit title deed,
• the number and location of the unit,
• the registered floor area,
• common areas,
• house rules and management arrangements,
• the status of the Condominium Juristic Person.

2. verify the unit title and registered owner

The unit title is the central evidence of ownership of the specific unit. Before purchasing, the buyer should verify who is registered as the owner and whether that person or company is legally entitled to sell the unit.

The following should be checked:

• the front and back of the unit title,
• the name of the registered owner,
• whether the registered owner matches the seller or contracting party,
• powers of attorney if someone other than the owner signs,
• the seller’s passport, identity card or company affidavit,
• for companies, the authority of the representatives and authorised signatories.

If the seller is a Thai company, the corporate documents available from the Department of Business Development, or DBD, should be reviewed. These may include the company affidavit, directors, signing authority and, where available, financial statements.

3. check encumbrances and third-party rights

Important registrations may appear on the back of the unit title. These should not be overlooked.

The following should be checked:

• mortgages,
• pledges or other security interests,
• court orders preventing transfer,
• existing tenancy rights,
• third-party rights of use,
• ongoing disputes,
• any other registrations at the Land Office.

A unit may be subject to substantial financial or legal encumbrances even if it is described in sales documents as “free from encumbrances” or “ready to transfer”.

4. obtain written confirmation of the foreign quota

Before making a payment, the availability of the Foreign Quota should be confirmed in writing. This confirmation should not come only from the seller. Where possible, it should also be supported by the Condominium Juristic Person or verified as part of the Land Office process.

The following questions should be answered:

• Is the unit currently available within the Foreign Quota?
• Will the 49% limit still be complied with after the transfer?
• Are there earlier sales or reservations that could affect the available quota?
• Can the Condominium Juristic Person confirm the quota?
• Is the Foreign Quota expressly addressed in the purchase agreement?

5. transfer of funds from abroad and fet evidence

For a foreign buyer purchasing a condominium, the source of the purchase funds is particularly important. In practice, the buyer must generally be able to demonstrate that the purchase price was properly transferred into Thailand from abroad.

The Foreign Exchange Transaction Form, commonly known as the FET and formerly referred to as Thor Tor 3, provides evidence of the foreign currency transfer and is required for registration with the Land Department.

Important points include:

• The funds should be transferred into Thailand from abroad.
• The purpose of the transfer should clearly state that the funds are for the purchase of a condominium.
• The buyer’s name should appear correctly on the bank documentation.
• The receiving bank in Thailand should confirm in advance which documents it can issue.
• For amounts below certain thresholds, alternative bank confirmations may be relevant instead of a traditional FET.

Errors in the transfer process can complicate or delay registration at the Land Office. The payment structure should therefore be coordinated with the bank, seller and legal adviser before the funds are transferred.

6. review the Purchase Agreement

The purchase agreement should not merely state the price. It should clearly regulate the entire transaction.

Important provisions include:

• the precise identification of the unit,
• the purchase price and payment schedule,
• the currency and method of transfer,
• confirmation of the Foreign Quota,
• termination rights following an unsatisfactory due diligence review,
• repayment of the reservation fee if legal issues arise,
• the handover date,
• the condition of the unit at handover,
• furniture and inventory,
• allocation of taxes and fees,
• consequences of a delayed transfer,
• documents the seller and buyer must bring to the transfer.

It is particularly important that the agreement reflects what can actually be registered at the Land Office.

7. do not underestimate the reservation agreement

Many buyers initially sign a short reservation agreement and pay a reservation fee. This document can nevertheless have significant legal consequences.

The following should be checked:

• Is the reservation fee refundable?
• Under what circumstances may the buyer withdraw?
• What happens if the Foreign Quota is unavailable?
• What happens if encumbrances are discovered?
• Is the purchase price fixed and binding?
• Is there a due diligence period?
• Is the buyer required to make further payments too early?

A reservation fee should not be paid while it remains unclear whether the seller is the legal owner, whether the unit can be transferred within the Foreign Quota or whether the unit is subject to legal encumbrances.

8. check outstanding common fees and the sinking fund

Condominium projects generally charge ongoing common fees and may also require contributions to a sinking fund. Before purchasing, the buyer should verify that the seller has paid all outstanding amounts and whether any significant future costs may be passed on to the buyer.

The following should be checked:

• outstanding common fees,
• sinking fund contributions,
• arrears owed by the seller,
• planned special assessments,
• major repairs or renovations,
• the financial position of the Condominium Juristic Person,
• minutes of important owners’ meetings,
• house rules and restrictions on use.

These points are especially important if the condominium is to be rented out, renovated or used as a holiday property.

9. check whether the intended rental or use is permitted

Not every condominium may be rented out or used for tourist accommodation without restriction. In addition to the house rules, hotel legislation, local regulations and rules issued by the Condominium Juristic Person may be relevant.

The following should be checked:

• Is long-term rental permitted?
• Is short-term rental permitted or restricted?
• Are there minimum rental periods?
• Are there restrictions on rentals through online platforms?
• Are there rules concerning pets, renovations, noise or commercial use?
• Is the intended use compatible with the house rules?

Anyone purchasing a condominium as an investment property should clarify these points before completing the purchase.

10. Calculate Taxes and Fees in Advance

Various taxes and fees arise when a condominium is transferred in Thailand. The transfer fee is generally 2% of the official appraised value. Depending on the circumstances, Specific Business Tax, Stamp Duty and Withholding Tax may also apply.

The parties may agree contractually who will bear each cost. Buyers should not leave this issue unresolved until the transfer date.

Documents required for an initial review

The following documents are typically useful for an initial due diligence review:

• a copy of the front and back of the unit title,
• the draft purchase agreement or reservation agreement,
• a copy of the seller’s passport or identity card,
• for companies, the company affidavit and DBD documents,
• confirmation from the Condominium Juristic Person regarding the Foreign Quota,
• evidence of outstanding or paid common fees,
• the condominium project’s house rules,
• information regarding the sinking fund and special assessments,
• an inventory list for a furnished purchase,
• the payment schedule,
• information about the intended transfer of funds,
• a draft power of attorney if a party will not attend in person.

Common mistakes made by foreign buyers

Foreign buyers frequently make similar mistakes when purchasing a condominium in Thailand. These include:

• confusing an apartment with a condominium,
• relying on sales brochures instead of verifying the registration,
• purchasing a Thai Quota unit without a legally sustainable structure,
• paying a reservation fee before checking the Foreign Quota,
• failing to examine the unit title,
• failing to examine the back of the title,
• paying unclear or non-refundable deposits,
• transferring funds incorrectly or without sufficient documentation,
• failing to check outstanding common fees,
• failing to review the house rules,
• assuming that tourist short-term rental is automatically permitted,
• failing to agree on taxes, fees and transfer costs.

Many of these mistakes can be avoided by carrying out due diligence before making the first substantial payment.

Warning signs when buying a condominium

Particular caution is required if:

• the seller provides only copies and no verifiable original documents,
• the unit is advertised as “Foreign Freehold” but no quota confirmation is available,
• the seller is not named as the owner on the unit title,
• a power of attorney is unclear or outdated,
• the reservation fee is stated to be non-refundable,
• substantial deposits are requested before due diligence,
• the bank documentation for the transfer of funds has not been clarified,
• outstanding common fees are concealed,
• the house rules are not provided,
• the seller makes verbal promises that are not included in the agreement.

Off-Plan Projects

Anyone purchasing an off-plan condominium or a project that has not yet been completed must also examine the developer, project land, building permit, payment schedule, Environmental Impact Assessment, construction progress and termination rights.

Conclusion

Purchasing a condominium in Thailand can provide foreign buyers with an attractive and legally straightforward ownership structure, provided that all statutory requirements are satisfied.

Note: This article provides a general overview and does not replace legal advice based on the individual circumstances of a particular case.